HSBC Holdings plc Sustainability Report 2007

into its business. We are involved in shaping the global insurance
industry’s response to the challenges posed by sustainability issues,
including climate change, through our involvement in leading forums
such as the UN Environment Programme Finance Initiative Insurance
Working Group.
From a business development perspective, HSBC Insurance is in the
process of developing insurance opportunities that support action to
address the causes or effects of climate change. In 2007, HSBC Insurance
Brokers pioneered new risk advisory services to assist clients with the
risks and opportunities posed by climate change at an enterprise level.
This incorporates both strategic risk management and climate modelling.
HSBC Insurance Brokers also launched a dedicated insurance facility
for renewable energy projects in 2007.
From an environmental perspective, HSBC Insurance Brokers are also
working with banking colleagues to provide specialist support in the
application and monitoring of environmental credit risk guidelines
through a web-based system. Such a system was put into full-scale pilot
for real estate lending in the UK, with the objective of rolling it out to
other countries as it matures.
Personal Financial Services (including consumer finance)
A changing world presents new business opportunities. We have
pursued these opportunities in 2007 by developing sustainable retail
products and services in the UK, US, Brazil, Singapore and Hong Kong
(see the case study below).
Case study: Personal Financial
Services
‘There’s no small change’
This large-scale marketing campaign launched by HSBC in
the US included marketing materials printed on Forest
Stewardship Council-certified and 100 per cent recycled
paper. Customers who opened a paperless HSBC current
account received a complimentary green kit which
contained ‘eco products’, information and guidance on the
small changes they could make. Donations of US$1 million
were made to local environmental organisations, including
the Buffalo Olmsted Parks Conservancy, City Parks
Foundation, Friends of the National Arboretum, the
Genessee Land Trust and the New York Botanical Garden,
among others.
Results
HSBC achieved higher response rates than planned, with
substantially higher deposit balances and increased customer
product holdings. Online bill payment rates were up
33 per cent and 52 per cent in April and May respectively
following the launch of the campaign, demonstrating
strong customer interest.
Microfinance
Microfinance is the provision of small-scale financial services such as
credit, savings, insurance and remittance products to people who do not
have access to financial services. Projects vary from wholesale lending
and credit lines to project support, cash management and foreign
exchange handling.
Microfinance presents a compelling commercial business opportunity
that offers the potential for commercial returns, both on capital and on
ancillary business, with a high social impact. It has the potential to be a
fully sustainable development activity.
Since 2004, HSBC has piloted a number of microfinance projects around
the world. In 2007, the Board approved an updated strategy which is
now being rolled out across Asia and Latin America. Our approach is to
engage with the microfinance sector on a commercially viable and
sustainable basis, not as philanthropy. The strategy exploits HSBC’s
strengths and focuses the business on our existing products and
operations such as cash and liquidity management, collections,
receivables, currency, remittances and cards.
Case study: Commercial Banking
Green equipment financing in Hong Kong
In July 2007, we launched a unique green equipment
financing product in Hong Kong to provide an incentive for
businesses to switch to low-carbon and energy-efficient
technologies. HSBC was the first bank in Hong Kong to
launch such a product, which is targeted at Hong Kongbased
companies with production facilities in the territory
or in China.
The Business Environment Council, an independent notfor-profit
organisation, supports the product, assessing the
environmental merits of the equipment being financed and
confirms the customers’ eligibility for the programme.
Borrowers benefit from an interest rebate of up to two
months, a 50 per cent waiver in documentary credit fees, a
six-month principal repayment moratorium, and a two-year
fee waiver on a BusinessVantage account. Additionally, for
every HK$2,000 of the loan amount, the bank donates
HK$1 to WWF Hong Kong to promote environmental
conservation.
Results
In the first six months of the product’s launch the response,
particularly in the small business market, was very favourable,
with both the number of applications and loan amounts
exceeding original expectations. This success has led to
HSBC being invited to be a strategic partner in the Cleaner
Production Partnership Programme, which is funded by
Hong Kong government and led by the Hong Kong
Productivity Council.
HSBC Holdings plc Sustainability Report 2007 17